antitrust: commission fines producers of tv and computer monitor tubes € 1.47 billion for two...

7/30/2019 Antitrust: Commission fines producers of TV and computer monitor tubes 1.47 billion for two decade-long cartels

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IP/12/1317

EUROPEAN COMMISSION

PRESS RELEASE

Brussels, 5 December 2012

Antitrust: Commission fines producers of TV and

computer monitor tubes 1.47 billion for two decade-

long cartels

The European Commission has fined seven international groups of companies a total of 1 470 515 000 for participating in either one or both of two distinct cartels in the sectorof cathode ray tubes ("CRT"). For almost ten years, between 1996 and 2006, thesecompanies fixed prices, shared markets, allocated customers between themselves andrestricted their output. One cartel concerned colour picture tubes used for televisions andthe other one colour display tubes used in computer monitors. The cartels operatedworldwide. The infringements found by the Commission therefore cover the entireEuropean Economic Area (EEA). Chunghwa, LG Electronics, Philips and Samsung SDIparticipated in both cartels, while Panasonic, Toshiba, MTPD (currently a Panasonicsubsidiary) and Technicolor (formerly Thomson) participated only in the cartel fortelevision tubes. Chunghwa received full immunity from fines under the Commission's2006 Leniency Notice for the two cartels, as it was the first to reveal their existence to theCommission. Other companies received reductions of their fines for their cooperation inthe investigation under the Commission's leniency programme.

Commission Vice President in charge of competition policy Joaqun Almunia said: "Thesecartels for cathode ray tubes are 'textbook cartels': they feature all the worst kinds of

anticompetitive behaviour that are strictly forbidden to companies doing business inEurope. Cathode ray tubes were a very important component in the making of televisionand computer screens. They accounted for 50 to 70% of the price of a screen. This givesan indication of the serious harm this illegal behaviour has caused both to television andcomputer screen producers in the EEA, and ultimately the harm it caused to the Europeanconsumers over the years".

The two CRT cartels are among the most organised cartels that the Commission hasinvestigated. For almost 10 years, the cartelists carried out the most harmful anti-

competitive practices including price fixing, market sharing, customer allocation, capacityand output coordination and exchanges of commercial sensitive information. The cartelistsalso monitored the implementation, including auditing compliance with the capacityrestrictions by plant visits in the case of the computer monitor tubes cartel.


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Top management level meetings, dubbed "green(s) meetings" by the cartelists themselves

because they were often followed by a golf game, designed the orientations for the twocartels. Preparation and implementation were carried out through lower level meetings,often referred to as "glass meetings", on a quarterly, monthly, sometimes even weeklybasis. Meetings were held in various locations in Asia (Taiwan, Korea, Japan, Malaysia,Indonesia, Thailand, Hong Kong, etc.) and Europe (Amsterdam, Budapest, Glasgow, Paris,Rome). The cartels operated worldwide.

Multilateral meetings usually started with a review of demand, production, sales andcapacity in the main sales areas, including Europe; then prices were discussed, includingfor individual customers, i.e. TV and computer manufacturers. They had therefore a directimpact on customers in the European Economic Area (EEA), ultimately harming finalconsumers. The cartelists were trying to address the decline of the CRT market in acollusive way, to the detriment of consumers. For example, one document recording the

cartel discussions spells out clearly: "producers need to avoid price competition throughcontrolling their production capacity".

The investigation also revealed that the companies were well aware they were breakingthe law. For instance, in a document found during the Commission's inspections, awarning goes as follows: "Everybody is requested to keep it as secret as it would beserious damage if it is open to customers or European Commission". The participants weretherefore taking precautions to avoid being in possession of anticompetitive documents.Some documents spelled out, for example: "Please dispose the following document afterreading it".

Fines

The fines were set on the basis of theCommission's 2006 Guidelines on fines(seeIP/06/857andMEMO/06/256).

In setting the level of fines, the Commission took into account the companies' sales of theproducts concerned in the EEA, the very serious nature of the infringement, its geographicscope, its implementation and its duration. If Chunghwa had not received full immunity,its fines would have been 8 385 000 for the TV tubes cartel and 8 594 000 for thecomputer monitor tubes cartel. Samsung SDI, Philips and Technicolor received reductionsof fines ranging from 10 to 40% for their cooperation under the Commission's leniencyprogramme. The reductions reflect the timing of their cooperation and the extent to whichthe evidence they provided helped the Commission to prove the respective cartels. One ofthe companies invoked its inability to pay the fine. The Commission assessed this claim

under point 35 of the 2006 fines Guidelines and granted a reduction of the fine.
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/256&format=HTML&aged=1&language=EN&guiLanguage=enhttp://ec.europa.eu/competition/antitrust/legislation/fines.htmlhttp://ec.europa.eu/competition/antitrust/legislation/fines.htmlhttp://ec.europa.eu/competition/antitrust/legislation/fines.htmlhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/857&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/857&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/857&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/256&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/256&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/256&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/256&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/256&format=HTML&aged=1&language=EN&guiLanguage=enhttp://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/857&format=HTML&aged=1&language=EN&guiLanguage=enhttp://ec.europa.eu/competition/antitrust/legislation/fines.html


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The fines imposed are as follows:

Name ofundertaking

Reduction underthe LeniencyNotice (%)

Fine for the TVtubes cartel1 ()

Fine for thecomputermonitor tubescartel1 ()

Total fine1()

Chunghwa2 100% 0 0 0

Samsung SDI 40% 81 424 000 69 418 000 150 842 000

Philips 30% 240 171 000 73 185 000 313 356 000

LG Electronics 0% 179 061 000 116 536 000 295 597 000

Philips and LG

Electronics2

30%(reduction only

for Philips) 322 892 000 69 048 000 391 940 000

Technicolor 10% 38 631 000 38 631 000

Panasonic 0% 157 478 000 157 478 000

Toshiba 0% 28 048 000 28 048 000

Panasonic,Toshiba andMTPD2

0%

86 738 000

86 738 000

Panasonic andMTPD2

0%7 885 000

7 885 000

TOTAL 1 142 328 000 328 187 000 1 470 515 000

1 Legal entities within the undertaking may be held jointly and severally liable for thewhole or part of the fine imposed.

2Jointly and severally liable for that whole fine imposed.

Background

A Cathode Ray Tube ("CRT") is an evacuated glass envelope containing an electron gunand a fluorescent screen. Two distinct types of CRTs are relevant for the cartels sanctionedin today's decisions: (i) colour display tubes (CDT) used in computer monitors and (ii)colour picture tubes (CPT) used for colour televisions. The CRT was gradually replaced byalternative techniques such as LCD and plasma displays.

The Commission's investigation started with unannounced inspections in November 2007(see MEMO/07/453). A statement of objections was issued in November 2009 (seeMEMO/09/525) on which the companies had the opportunity to comment and to be heard.A supplementary statement of objections concerning corporate liability was issued in June2012 against two companies.

More information on this case will be available under the case number 39437 in theCommission'spublic case registeron thecompetitionwebsite, once confidentiality issueshave been dealt with. For more information on the Commissions action against cartels,see itscartelswebsite.
http://europa.eu/rapid/press-release_MEMO-07-453_en.htmhttp://europa.eu/rapid/press-release_MEMO-09-525_en.htm?locale=enhttp://europa.eu/rapid/press-release_MEMO-09-525_en.htm?locale=enhttp://europa.eu/rapid/press-release_MEMO-07-453_en.htmhttp://europa.eu/rapid/press-release_MEMO-07-453_en.htmhttp://europa.eu/rapid/press-release_MEMO-09-525_en.htm?locale=enhttp://europa.eu/rapid/press-release_MEMO-09-525_en.htm?locale=enhttp://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy_area_id=1http://ec.europa.eu/competition/index_en.htmlhttp://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39437http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39437http://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy_area_id=1http://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy_area_id=1http://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy_area_id=1http://ec.europa.eu/competition/index_en.htmlhttp://ec.europa.eu/competition/index_en.htmlhttp://ec.europa.eu/competition/index_en.htmlhttp://ec.europa.eu/competition/cartels/overview/index_en.htmlhttp://ec.europa.eu/competition/cartels/overview/index_en.htmlhttp://ec.europa.eu/competition/cartels/overview/index_en.htmlhttp://ec.europa.eu/competition/cartels/overview/index_en.htmlhttp://ec.europa.eu/competition/cartels/overview/index_en.htmlhttp://ec.europa.eu/competition/index_en.htmlhttp://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy_area_id=1http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39437http://europa.eu/rapid/press-release_MEMO-09-525_en.htm?locale=enhttp://europa.eu/rapid/press-release_MEMO-07-453_en.htm


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Action for damagesAny person or firm affected by anti-competitive behaviour as described in this case maybring the matter before the courts of the Member States and seek damages. The case lawof the European Court of Justice (ECJ) and the Antitrust Regulation (Council Regulation1/2003) both confirm that in cases before national courts, a Commission decision isbinding proof that the behaviour took place and was illegal. Even though the Commissionhas fined the companies concerned, damages may be awarded without these beingreduced on account of the Commission fine.

The Commission considers that meritorious claims for damages should be aimed atcompensating, in a fair way, the victims of an infringement for the harm done. Moreinformation on antitrust damages actions, including the public consultation and a citizens'

summary, is available at:http://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.html

Contacts :

Antoine Colombani (+32 2 297 45 13)

Marisa Gonzalez Iglesias (+32 2 295 19 25)
http://ec.europa.eu/competition/antitrust/legislation/regulations.htmlhttp://ec.europa.eu/competition/antitrust/legislation/regulations.htmlhttp://ec.europa.eu/competition/antitrust/legislation/regulations.htmlhttp://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.htmlhttp://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.htmlmailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.htmlhttp://ec.europa.eu/competition/antitrust/legislation/regulations.html

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